Shinsegae to operate first Jeju-based hotel

By Kang Seung-woo

The Kensington Jeju Hotel, one of tourists' favorite properties on the resort island, will close its doors in May.

However, it will be revived as a brand new hotel that will be operated by Shinsegae Chosun Hotel, which aims to place itself as one of the locally grown hospitality giants along with Hotel Shilla and Lotte Hotels and Resorts.

“Until the end of May, the hotel will be operated in the name of the Kensington hotel,” a Kensington official said. “After that, Shinsegae will take over the business and the name is probably likely to be changed.”

In February 2018, E-Land Group sold the Kensington hotel and a nearby site allotted for building the Sangrok Hotel to B&M Development, a subsidiary of SK Group's real estate developing unit SK D&D, for 128 billion won ($114 million) in a bid to improve its financial stability.

Even after selling the Kensington, it has still remained an operator of the five-star hotel, located in the Jungmun Tourist Complex in a southern part of the island.

However, the operation deal is scheduled to expire in June and Shinsegae Chosun Hotel will succeed the operation and management.

Upon the takeover, the property is expected to undergo a one-year renovation, which is likely to start in July.

According to a market report, SK D&D is set to invest more than 200 billion won ― 57.3 billion won for this year and 150 billion won for next year ― in remodeling the property.

“Nothing has been decided yet about the hotel's naming, concept and others,” a Shinsegae official said.

It is forecast that SK D&D will launch an extensive renovation of the Kensington, including improving its 221 rooms and changing the interior concept. However, its rooftop pool and restaurants that have gained recognition from tourists are likely to remain intact.

In particular, 40 pool villas will be built at the site originally reserved for the Sangrok Hotel.

It will be the first time for Shinsegae Chosun Hotel to operate a hotel on Jeju Island, where its rivals Shilla and Lotte have established strong footholds. It is the accommodation arm of retail giant Shinsegae Group.

Shinsegae currently runs Westin Chosun hotels in Seoul and Busan, the Four Points by Sheraton Seoul Namsan and the L'Escape Hotel. The latest deal is seen as a move for Shinsegae Group Vice Chairman Chung Yong-jin to bolster his company's hotel business.

As Shinsegae is set to manage the Kensington hotel, there are mixed responses on the deal.

Some are concerned the hotel may lose its identity aiming to cater to both families and young vacationers, considering Shinsegae's latest setback from the L'Escape Hotel.

Under the concept of the 19th-century Paris aristocracy, Shinsegae launched its ambitious standalone brand last July, but it has yet to live up to expectations.

However, others say if the Kensington takes advantage of the nearby site, it could emerge as one of the top three hotels on Jeju.